US stocks ended lower for the week, snapping a three-week winning streak, as investors soured on artificial intelligence companies whose soaring valuations had driven markets to record highs earlier this year.
The Nasdaq Composite, heavily weighted toward technology giants, slumped 3% over the week—its sharpest decline since April’s global sell-off triggered by President Donald Trump’s “Liberation Day” tariff rollout.
The S&P 500 fell 1.6%, ending its run of gains, while the Dow Jones Industrial Average finished marginally higher on Friday after rebounding late in the session.
Despite the losses, both the S&P 500 and Nasdaq remain up strongly for the year.
Tech shares led the pullback, wiping out about $820 billion in market value across major AI-linked companies including Microsoft, Nvidia, AMD, Palantir, Oracle and Meta Platforms.
Nvidia lost 7%, Oracle and AMD each fell nearly 9%, and Meta and Microsoft dropped around 4%. Server maker Super Micro Computer plunged 23%, making it the worst performer in the S&P 500 this week. The index’s technology sector as a whole declined 4.2%.
Apple and Alphabet weathered the storm, slipping less than 1% each, while Amazon managed a small gain.
The sell-off began Tuesday after Palantir’s earnings report reignited fears that AI valuations had become unsustainable. Nervous sentiment deepened when Nvidia CEO Jensen Huang told the Financial Times that China could soon “win the AI race,” a remark he later softened, saying the country was “nanoseconds behind America.”
Adding to the anxiety, a month-long federal government shutdown has deprived investors of crucial economic data, including jobs and inflation reports.
“Consumers are now expressing worries about potential negative consequences for the economy,” said Joanne Hsu, director of the University of Michigan’s consumer sentiment survey, which fell near record lows this week.
Alternative indicators have painted a grim picture: private payroll data from ADP showed only 42,000 new jobs, while Challenger, Gray & Christmas reported that planned job cuts reached their highest October level in 22 years.
Asked whether he feared an “AI bubble,” President Trump dismissed the concern. “No, I love AI,” he said. “We’re leading China, we’re leading the world.”
